Cement producers operating clinker facilities in Tamil Nadu are set to face pressure on profitability because of the state's decision to impose a new levy on limestone, which will increase their cost on the key raw material. Dalmia Bharat and Ramco Cements will likely be the most impacted unless they are able to pass on the higher cost to consumers in the form of price hikes. Market leader UltraTech and ACC too will take a hit, albeit a minor one since the state accounts for only a small portion of their capacities. The Tamil Nadu Mineral Bearing Land Tax Act, 2024, imposes a levy of ?160 per tonne on limestone. Limestone accounts for nearly two-thirds of the cost of raw materials and about 5% of the operating cost for cement makers. While Ramco has more than half of its clinker capacity in Tamil Nadu, Dalmia Bharat has about a fourth. The country's largest cement producer UltraTech has around 4% of its clinker capacity in the state; ACC has about 2%. "The south region is witnessing multiple headwinds over the last one year, e.g., multi-year-low cement prices, weak government spending and higher competitive intensity," analysts at Motilal Oswal Securities wrote in a note. Prices are expected to remain under pressure going ahead as well. Over the last few months, market leaders acquired four South-based cement makers, with 44 million tonnes of capacity moving to large players.
 

https://www.livehomes.in/news_letter